sum assured under a fire policy with an insurance company merely marks the limit beyond which the liability of a company does not go in idemnifying the insured; it is no measure of the actual value. It is also a fundamental principle of the fire insurance contract, as far as the insurance companies are concerned, that the indemnity is for actual material loss caused by a particular fire and does not extend to loss of profits or damage to trade which may be the effect of the occurrence of the fire. In the case of buildings, loss of rent may be provided for by a specific insurance for that purpose. Loss by fire nowadays includes loss by lightning, whether a fire occurs or not, and also usually includes damage from explosion of coal-gas in buildings other than those forming part of a gasworks. It will be seen that a fire insurance contract is strictly limited and that it is designed to prevent any one from making a profit out of a fire. In this respect there is a great and important difference between a fire and a marine insurance contract. A marine insurance policy, though primarily one of indemnity, goes in practice much further and in most cases admits the value of the objects insured. Thus if a vessel insured for £50,000 is totally lost the sum payable under the policy is £50,000 at least. It may be more since the underwriters have to bear the cost of any attempts they may have made at salvage. In the same way the value of consignments of cargo are admitted in a policy. The effect of this difference is that while one cannot or is not supposed to make a profit out of a loss by fire on land, it is no uncommon

thing to make a profit out of a loss from any cause by sea. It is in fact part of the ordinary marine business to insure the profits which are expected to be made out of a voyage and also to secure indemnity against the indirect losses which may be incurred through the wreck of a ship. These total loss policies for "disbursements," "profits profits" or "freight" are not always legal documents since they often transgress the law which requires that an insurance can only be effected to the extent of an actual interest, but they are, of course, never disputed on this account by the underwriters or companies which grant them.

If a ship which is insured for a year or for a voyage under a "valued policy "—that is, a policy in which the value of the subject of insurance is admitted as correct-suffers from a casualty of a partial and not a total nature-and these partial losses are, of course, in the great majority-then the marine contract is one simply of indemnity. The underwriters bear the cost of salving and repairing the vessel. They in fact "reinstate" the vessel as nearly as possible, a proceeding which is a familiar one in the case of fire insurance. But where partial losses occur in cargo it is usual to pay the full admitted value of that part of the cargo which is damaged and the underwriters recover what they can by way of salvage.

I give this illustration from the practice of marine insurance because members of Lloyd's sometimes issue fire insurance policies on the system to which they have been accustomed in connection with marine business, and it has been urged that the ordinary fire

insurance policy does not fully meet the requirements of the public, through being so strictly one of indemnity and indemnity only.

LLOYD'S FIRE POLICIES.

And here it will probably be of interest if I explain the practice of the leading underwriters at Lloyd's, who turn their attention to fire insurance business. The great majority of their policies are part of insurances in which the fire offices are already interested. The Lloyd's underwriters merely take a surplus line, or a reinsurance, and they follow the rates of premium, the conditions and the settlements of the insurance companies with which they are temporarily associated. In this there is nothing which calls for attention. But there are transacted at Lloyd's two other classes of fire insurance. In special cases where underwriters know the insured, or the insurance brokers through whom the business is placed know the insured, valued policies are issued both on buildings and on goods. A value is agreed at the outset and if a total loss occurs the whole sum insured is paid. This is a special class of business and is not transacted unless the position, property and circumstances of the insured are known. It is not done over the counter for Tom, Dick and Harry, as the fire offices are obliged to do their business. In the case of goods under "valued policies" an inventory is agreed and any changes in that inventory, whether by way of additions or of withdrawals, have

to be notified if the insured is to receive full protection. The advantages of the system even on the restricted lines upon which it is in force at Lloyd's seem very doubtful. It is clearly not suited to a private householder, assuming that members of Lloyd's would accept his business, since he would, strictly speaking, have to notify every change in his household goods if he wished always to be covered; this would be a perfect nuisance, much worse than the preservation of bills and vouchers for furniture purchased which it is desirable to do when an ordinary indemnity policy has been taken out. But there is another class of special fire insurances at Lloyd's which, it seems to me, really does meet the requirements of the public. This is the insurance of loss of profits due to a fire. The contract of a fire insurance company takes no cognisance of loss of profits or trade -although loss of rent may be provided for—and yet a loss of profits may be a much more serious matter than the value of the property destroyed. Take, for instance, the case of a theatre or a show like Madame Tussaud's. A fire might easily destroy the whole run of a piece or a season of business, and cause the loss of large sums spent in preparation. Numerous instances of such prospective losses will readily occur to the reader. Now members of Lloyd's do in approved cases issue policies to meet this contingency of loss of profits or trade. Like the "disbursement " policies of the marine companies and underwriters they are not always strictly legal, but they are never disputed on that account. Provided that due care is

used in accepting risks of the kind, and that the occurrence of a fire is not made too desirable a contingency from the insured's point of view, there does seem a good deal to be said for an occasional extension of the measure of indemnity for loss from fire granted by insurance companies. It seems strange sometimes to an observer like myself that in the case of a company which does several branches of insurance business-fire, marine, life, etc.—the marine underwriter should freely accept the insurance of the "loss of profits" of a shipowner or merchant through a casualty at sea, while the fire manager of the very same company in an adjacent room would shrink in horror from doing a similar thing in regard to a casualty on land. But even after admitting the possible propriety of now and then making in approved cases a concession to public needs, there can be little doubt that fire insurance companies by their adherence to strict legality have escaped many evils. At the same time both as regards the principles of their business, and the manner in which those principles are interpreted in practice, fire managers should remember that accusations of narrow-mindedness may sometimes be deserved. May I be permitted to say that most fire insurance men who are attached to the companies are apt to rate Lloyd's too cheaply. In spite of the absence of direct evidence of security, and in spite of occasional failures and scandals-of which we had a bad example during the summer of 1903-the system of private underwriting at Lloyd's, the oldest and most elementary system of insurance